Are Unpaid Internships Illegal?

There is a debate raging out the legality of unpaid internships. For years, employers have offered unpaid internships to students, operating under the belief that the experience valuable enough that a wage or stipend would be not be required. But, is that illegal?

Sometimes. The Department of Labor views has a six-part test to help schools and internship providers determine if an internship should be paid or not. If a for-profit company does not meet all six points, then the student is entitled to minimum wage and, potentially, overtime. Note than non-profits and government entities are not bound by these rules.

The point that likely sticks out to internship coordinators and internship providers is #4: The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion it operations may actually be impeded. In other words, an intern cannot produce something of value for the company or organization. Many interns I work are sought after specifically because of the information they have about a specific sector or industry, particularly if it involves new technology or theories. Many times, this is information that the internship provider does not have and they look to their intern for guidance. Under this rule, this type of thinking becomes more complicated.

The fact is, many students will accept unpaid internships because they want the experience. That experience will look good on their resume and could boost their chances of finding a job after graduation. However, as more students become educated about this law (which is not new, by the way), there is bound to be one that will sue its internship provider for back wages. Internship providers can avoid this by doing two things:

1.) Make sure your internship is truly a learning experience and not a chance for you to get some free labor. Any decent internship coordinator should be able to weed out the internships that involve a student going to Starbucks for the boss or counting paperclips, but ultimately, the student is the one who accepts the internship. Don't take advantage.

2.) Pay your intern. Offering academic credit is not a fair exchange for cash. Students have to pay tuition for academic credit, so in many cases, they are PAYING to do the internship. Also, consider the fact that you are shrinking your pool of candidates by not offering pay. Not all students have the option to take an unpaid internship. You could be missing out on a great intern by trying to save a few bucks an hour.